In its latest accounts published by Companies House, the bridging lender said the performance related predominantly to historic and overdue borrower non-realised debt and the potential overestimated recovery of non-performing loans in previous years.
Fincorp had a number of historical loans that were technically in default and the opportunity was taken to make provisions in respect of all loans where there was reason to doubt recovery.
As a result, provisions totalling £8.4m were made resulting in the reported loss. In 2015, Fincorp suffered losses of £15.9m.
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Two of its the directors had also resigned in September 2015 and subsequently left the company in December that year.
In May 2016, Elio Astone was appointed director at Fincorp.
“I instigated a comprehensive review of the overall loan book and expected future realisations.
“At the time of filing these accounts, the review instigated is ongoing.”
Elio stated that Fincorp was still actively lending and added: “The review and collection of historic legacy debts is ongoing as well as instituting management and underwriting procedures to ensure that the significant losses incurred by the business in this trading year and those prior can be mitigated in the future.
“We are also exploring new opportunities.”
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